George Osborne has today presented his last real budget. It can only be described as a final lost opportunity in a long string of them.
He’s continuing the failed policy of austerity, even though its always fragile intellectual foundations have been entirely debunked. He’s continued to carve away at the already grossly inadequate measures to shift Britain towards a low-carbon economy. And he’s created the conditions for even greater inequality in a country, and a world, in which that’s been identified as a major existential threat.
He’s claimed to be on the path to an economy that works for people, yet very clearly this isn’t the case: eight out of 10 jobs created since 2010 are in London and 80 per cent in low-pay sectors such as retail and catering; youth unemployment continues to hover around the one million mark, permanently scarring lives; and today’s much-vaunted overall unemployment figures mask a leap in the number of the self-employed, who are often forced into that position and face low pay and uncertainty. And the cash ISA limit lift to £15,000? Hardly help to anyone on the median wage of £26,500.
So what might have been in a budget that started to prepare Britain for the 21st century, instead of returning us to an even worse model of 2006? This isn’t a complete alternative budget, but five positive suggestions of what might have been.
1. Begin to seriously tackle inequality
Osborne might have declared that the Government would reset the minimum wage to be at least a living wage. This would immediately improve the position of 20 per cent of British workers now paid less than this, and have the added benefit of an injection of £2 billion into the Treasury through increased tax and National Insurance income and reduced family tax credit and housing benefit payments.
That money could go towards a guarantee to lift public sector workers’ pay by at least the level of inflation plus one per cent in the coming year, with a commitment to eventually make up the real wage losses of those workers since 2010.
Further funding for that could come from the reintroduction of the 50p tax rate, to be applied on earnings more than £100,000 a year.
2. Take steps to reduce the threat of the financial sector and multinational companies to our economy and small businesses
Osborne could have said he would join the 11 European states, including France and Germany, already committed to the financial transaction tax (also known as Robin Hood or Tobin tax), and called for it to be set at a level that would help to substantially limit high frequency trading. He could have promised further reforms to reduce the risk of a future financial crisis and make the sector work for the ‘real’ economy.
He could have promised to implement Green MP Caroline Lucas’s Tax and Financial Transparency Bill 2011, which would, among other measures, require all companies filing accounts in the UK to include a statement on the turnover, pre-tax profit, tax charge and actual tax paid for each country in which they operate. This would force the likes of Starbucks, Amazon, Ikea, and far too many other of the “big names” of our consumer economy to reveal just how little they’re contributing to the societies from which they are drawing their profits.
3. Adopt the Energy Bill Revolution
This would take the government’s income from carbon taxes (not cut back in the wholly retrograde step Osborne took today) to provide energy efficiency measures to lift nine out of 10 households out of fuel poverty, create up to 200,000 jobs, and cut carbon emissions.
4. Housing – build truly affordable homes for rent
It’s past time to end the massive privatisation programme that is Right to Buy, and allow local councils to engage in significant prudential borrowing to build homes to be let at truly affordable prices, not the 80 per cent of market rent this government falsely calls affordable, but at traditional levels of around 30 per cent of market rates. Appropriate government land should be used for this aim, and a massive drive launched to back Community Land Trusts and co-operatives.
5. Scrap Trident nuclear weapons and the programme to replace them
This would represent an immediate government saving of £2.4 billion a year, and a saving to the government over the life of the proposed replacement of £100 billion.